The Bitcoin market is experiencing a gradual trend reversal after weeks of prolonged price correction between October and November. However, recent on-chain data shows a worrying trend around BTC’s bullish structure.
Bitcoin IFP indicator suggests that the market has reached a turning point
Popular analytics page that Arab Chain has shared a cautionary insight into the Bitcoin market despite the moderate price recovery in recent weeks. After experiencing a 36.5% correction from its all-time high at $126,000, the market leader has seen a significant recovery of late, from $80,000 to $94,000 in the past three weeks.
However, data from the Bitcoin Inter-Exchange Flow Pulse (IFP) suggests that the upward price momentum may be short-lived. For perspective, the Bitcoin IFP measures the net movement of Bitcoin between exchanges over a given period of time. Arab Chain explains that the IFP indicator continues to trend downwards after falling below the 90-day moving average (MA), indicating weakening market participation amid less “bullish” flows between exchanges.
Furthermore, the IFP is also in the red zone, which historically coincides with or precedes a correction period or weak structural momentum that could precede a broader downtrend. Combined, these developments imply that the Bitcoin market is at a critical crossroads as there is a reduction in currency flows that have historically supported price increases in previous market phases.
Is the bullish run over?
Amid the structural weakness highlighted by the IFP indicator, Arab Chain also noted that the price remains relatively high compared to previous levels in similar situations. The analysts explain that this indicates that the price and inflows are temporarily moving independently of each other. Based on historical data, such detachments usually indicate a prolonged price consolidation or a significant period of prolonged sideways movement until exchange flows can restore market dominance.
Therefore, Bitcoin’s bullish structure does not collapse into a bearish state. However, developments in IFP figures indicate that there may not be a sustained upward movement in the near term due to the structural slowdown in exchange flows. Furthermore, the price is likely to become sensitive to changes in market liquidity. So there is also significant potential for a new correction.
At the time of writing, Bitcoin is trading at $90,338, reflecting a decline of 1.82% in the past 24 hours. Meanwhile, daily trading volume has increased by 34.64% and is valued at $82.68 billion. According to Arab Chain, a continued price rally will only occur if the IFP successfully regains its 90-day MA, signaling an increase in bullish currency flows.